March 6, 2018

Make them pay for their own militaries, and repudiate debt, if they escalate trade war (NATO, Japan, South Korea)

If the entire GOP-Koch apparatus is going to come out of the woodwork to subvert Trump's would-be trade war, then his only power is rhetorical. But that can still do a lot of good toward shifting us out of the Reaganite regime and into the Bernie regime.

Since he's already covered how much our working and middle classes are impoverished by free trade, which only benefits the very top of the class pyramid, the next major issue he should thrust into the national discussion is how our military is complicit in the de-industrialization program.

Wealthy countries like Germany, Italy, Canada, Japan, and South Korea do so much manufacturing and heavy industry, making themselves net exporters rather than importers. Their governments have so much money to invest in their own domestic industries because they do not have to spend the tons of money it takes to operate a national military.

Why not? Because the empire-seekers among the Pentagon brass are only too happy to provide the military power for these nations, operating at a gigantic monetary loss for America, in exchange for getting to brag about how many squares they occupy on the global chess board.

Ordinary Americans do not benefit from the Pentagon occupying more rather than fewer chess board squares -- otherwise we would've seen those benefits a long time ago. It's not like the Pentagon just started providing the military for Germany and Japan yesterday. That goes all the way back to the aftermath of WWII.

Partly this was to prevent the Axis powers from re-militarizing, and partly it was to push back against the Soviets via NATO. Both reasons have evaporated in the meantime, so we ought to pull out entirely.

The Pentagon does not use its occupation of these chess board squares in order to send valuable stuff back to America, like the old system of using force to raid the resources of other countries. They don't even charge rent to the host nations!

The Pentagon provides us with absolutely nothing in return for our funding their global occupation to the tune of trillions of dollars, which will eventually bankrupt the nation as all endless wars have done.

Thus, our fruitless globalist military occupation worsens not only our fiscal deficit -- spending so much on the Pentagon's overseas operations and getting no return on our investment -- but also our trade deficit, allowing those nations for whom we provide the military to re-allocate what should be their military budget into domestic industries, and then importing from them all the things that we forgo manufacturing ourselves. After wasting so much on military occupations, we have nothing left to invest in our industries.

This presents us with two powerful trump cards in dealing with these nations during a trade war.

First, when they retaliate against our initial tariffs, we will pull out our military, and they will have to shift tons of money from subsidizing their industries into providing their own military for a change. That will instantly shrink our trade deficit with them -- they will be manufacturing and exporting less, and we will be manufacturing and exporting more, after we re-allocate that part of our military budget into industrial investment.

And second, we can repudiate the massive debt that we owe them. It is no surprise that these nations are also among the largest holders of our national debt (along with China). They convert their trade surplus with us into buy orders for US treasury bonds, which are a form of a loan that we agree to pay back with interest in the future.

Because our national debt has grown to such unsustainable levels, at first due to military imperialism but now also due to bailing out the financial system for the past 10 years, we will not be able to pay back all of it to every nation that we owe money to.

The natural targets for not paying back the debt we owe are those countries who have benefited so much and for so long from our provision of their military needs. The only reason they could invest so much in manufacturing, sell those goods to us at such high surpluses, and then convert that into US treasuries -- owning so much of our debt -- is that we gave them a free military.

Repudiating the debt we owe them is simply collecting on the unpaid debt that they have been running up with us for decades, by enjoying the benefits of the US military providing their national defense, while not having to pay what it costs. It is a settling of debts owed between two parties, rather than unilateral default.

We will do that also for the massive debt we owe to OPEC nations, as the Gulf jihadist monarchies have enjoyed the use of our endless military spending, without having to pay for it.

The only large holder of our debt who we cannot economically destroy by withdrawing our military, as we do not provide their military, is China. That will be more of a straight-up economic war, although we are still left with plenty of reasons to consider repudiating (at least a big chunk of) the debt we owe them to be settling a debt that they actually owe us -- such as their ripping off of our intellectual property, counterfeiting, adulterating substances they send us (like infant formula), and so on and so forth.

Trump came back to these themes over and over during the campaign, but nothing has happened on them since he took office. As with tariffs, the reason is that he would be directly attacking the material interests of the elites in those sectors of society that control the GOP -- manufacturing owners, energy companies, mega-farm landowners, and the globalist branches of the military.

The GOP is not going to let one guy weaken the party's own elite sectors, just to benefit the working and middle classes in America. Why would they? Just because he won an election? What a quaint idea!

As with tariffs, Trump may be able to pull off some small change here or there -- maybe getting the NATO countries to pony up the 2% of their GDP that they promised to compensate Uncle Sam for providing most of the military budget. That is still not happening for the main beneficiaries like Germany.

Maybe instead of polite dialog to beg Germany to pay 2% of GDP toward NATO, Trump simply holds a press conference or roundtable discussion where he "announces his intention" to pull our military out of Germany, saving us an absolute fortune while not affecting our own national security one bit. Then pointing out how we will re-allocate that military spending toward industrial spending, while Germany must do the opposite -- then let's see what happens to those trade deficits!

Whether or not that goes through (unlikely with the GOP in full control of the government), it at least shifts the Overton window in the anti-imperial, pro-industrial direction. That will tee up the full shift in policy for the upcoming Bernie regime, whose party is not beholden to manufacturing owners seeking to cut the cost of materials and labor, oil companies looking to do business in the Middle East, or the Pentagon looking to preserve its pointless global footprint just cuz.

The Democrats are beholden to the finance sector, tech companies, and media, but these do not have such vested material interests in running massive endless trade deficits through free trade. They won't get harmed by high tariffs on materials since they don't manufacture anything, and they have no need to provide the military for wealthy nations.

At worst, Facebook, Hollywood, and Goldman Sachs do not get unrestrained access to China's market -- but most of that is already bound to happen anyway. And those sectors will still make boatloads of money purely from the American market.

In the larger project to de-globalize American society, we cannot lose sight of the crucial role that our military brass play in entangling us within the great big over-extended global system.